1.
Live below your means. You cannot become debt-free if you spend more than
you earn. It's that simple! Financial stress relief is called "money in the
bank" or "positive cash flow."

2.
Decide where you want to spend your money. Don't let others decide for
you. Know how much money you are bringing in, how much goes out and to where it
goes. If you are not satisfied with the answers you get from this exercise, now
is the time to change your spending habits. You (and your significant other) are
ultimately responsible for how your money is spent.

3.
Pay your bills on time, every time. Managing monthly bills is an essential
part of staying debt free and maintaining a good credit rating. If you find this
difficult, come up with a system to ensure that bills are not paid late.

4.
Set financial goals, both short- and long-term. Having goals in place makes
it easier to make the necessary spending cuts to get what you really want. Without
reasons to cut spending and save, you will constantly be under pressure to spend
money you don't have for things you don't need.

5.
Use credit only as a tool and with a plan. Figure out how and when you
will pay the balance. Imagine building a house without a plan or blueprints. That's
what your financial house will look like, too, without a plan. Your goal should
be to pay for credit card purchases within three months. Remember, unlike wine,
cheese or my wife, debts do not improve with age.

6.
Have an adequate emergency
savings fund. Life will throw curveballs at you, ranging from the need
to replace a worn-out washing machine to a temporary job loss. Three to six months'
worth of bare-bones living expenses should shield you from most of these problems.
Can't do three months' worth? Start with three days' worth and watch it grow as
saving becomes a habit.

7.
Learn how to invest your savings. Your money has to earn more money to
keep you out of debt, especially in your later years. Take a class, find a referral
to a great adviser or just start reading. Do it your way, but do it; and start
now!

So there it is, my seven for '07. May you have a debt-free
New Year!

The Debt Adviser, Steve Bucci, is the president
of Money Management International Financial Education Foundation and the author
of "Credit
Repair Kit for Dummies." Visit MMI
for additional debt advice or to ask a question of the Debt Adviser, go to the
"Ask the Experts" page
and select "debt" as the topic.